Greek Lenders Place Postbank Bids as Cash Offers Discouraged

July 10 (Bloomberg) -- Greece’s biggest lenders all placed
separate bids for state-controlled Hellenic Postbank SA even
after the fund running the sale indicated that cash offers might
be discouraged.

Eurobank Ergasias SA, Alpha Bank SA, National Bank of
Greece SA and Piraeus Bank SA’s Geniki unit said in filings to
the Athens stock exchange today that they had submitted binding
offers for the lender, without elaborating on whether they are
planning to use cash or shares for the purchase.

Goldman Sachs Group Inc., which is advising the Hellenic
Financial Stability Fund, yesterday told bidders just hours
before the offer deadline that the Bank of Greece is urging
banks to reduce their dependency on the Emergency Liquidity
Assistance, said an official at the HFSF who spoke on the
condition of anonymity. The reiteration may be an effort to rule
out cash offers, according to a person familiar with the sale,
who asked not to be identified because the matter is private.

Stock offers are less attractive to Alpha, National Bank of
Greece and Piraeus, which have remained outside full state
control after raising funds from private investors. The Postbank
sale will bring the country a step closer to meeting the
conditions for the latest round of loans from its international
bailout.

Toxic Assets

Under ELA, the euro area’s national central banks are able
to provide emergency liquidity to lenders that are unable to
raise collateral acceptable to the European Central Bank. Greek
banks have borrowed 19.9 billion euros ($26 billion) from the
ELA, central bank data show.

The HFSF last year took control of Hellenic Postbank and
split into a so-called good bank and a bad bank, which will
house its most toxic assets and will be retained by the
government. By buying the Athens-based lender, which received 4
billion euros in capital after hiving off its bad assets, the
purchaser will get access to about 12 billion euros of deposits.
The bank has about 500 million euros of net assets.

The sale of the good bank must be agreed by July 15,
according to terms of the country’s 240 billion-euro bailout
agreed by the International Monetary Fund, ECB and the European
Commission. Euro area finance ministers meeting in Brussels this
week agreed to release 3 billion euros of loans for Greece
provided the country meets its bailout targets for this month.